After Negotiations, Israel's 2019 Budget Heads to Knesset a Bit Slimmer

Kahlon agrees to cut a third of law’s clauses to ensure speedy approval by lawmakers

Finance Minister Moshe Kahlon in Netivot, Israel, February 6, 2018
\ AMIR COHEN/ REUTERS

The 2019 budget and Economic Arrangements Law will go to the Knesset on Sunday after weeks of negotiation between Finance Minister Moshe Kahlon and Knesset Speaker Yuli Edelstein wound up on Wednesday with a much trimmed-down Arrangements Law.

The two agreed to move 14 of 44 clauses in the Arrangements Law – legislation that accompanies the budget – citing the need for lawmakers to complete deliberation on the two measures in a compressed one-month time frame.

The Knesset will hold the first of three votes on the two measures next Tuesday and then committees will have about 14 days to hold deliberations.

Even though the treasury backed down on a third of the items in the Arrangements Law, Kahlon said the concessions were a reasonable compromise.

“The understandings we reached enable us to continue to implement the Finance Ministry’s policy of growing the economy, narrowing social gaps, reducing the cost of living and solving the housing crisis,” Kahlon said. “The budget for 2019 is responsible and balanced that takes into account the overall needs of the Israeli economy.”

Among the item scrapped from the Arrangements Law were new rules on political appointments at government-owned companies, penalties to be imposed on local authorities that fail to use building rights, a requirement to publish fees for private surgery and a lengthening of tax exemptions of new immigrants.

A much debated plan for raising government allowances for the handicapped was also dropped from the law but is going to be voted on by the Knesset in separate legislation that was already presented to lawmakers.

The 2019 budget, which the treasury released to the public on Monday, is a 479 billion shekel ($137 billion) affair that contains more than 10 billion shekels in spending cuts and increases in the deficit to pay for Kahlons various “Net” programs.

Prime Minister Benjamin Netanyahu is anxious to pass the budget in advance of 2019 in order to ensure there are not coalition crises over fiscal issues in the coming months that could topple his government as he faces a series of police investigations.